State of the Union Address Agenda Adds Up to $83.4 Billion, Does Deficit Pledge Mean More Tax Hikes?

(Alexandria, VA) -- In President Obama’s most expensive and widest ranging State of the Union Address yet, his proposals weighed in at $83.4 billion worth of quantifiable agenda items, according to National Taxpayers Union Foundation’s (NTUF's) annual line-by-line analysis of the speech. This figure could grow much higher depending on what the President aims to do to avoid the sequester. In either case, if the President intends to follow through on his promise that his speech would not “add a dime to the deficit,” individuals and businesses may be facing another round of tax increases.

“The speech gave the President the opportunity to preview his forthcoming budget,” said NTUF Director of Research Demian Brady. “And although he said his agenda items would not increase the deficit, he spent far more time detailing new spending initiatives than how they would be ‘paid for.’”

While the President mentioned closing “loopholes” in the Tax Code, and made yet another reference to the well off doing their part when it comes to federal health care expenses, he failed to lay out a clear vision of exactly what tax policies would be altered.

NTUF’s key findings on the President’s fiscal proposals:

By far the most costly single agenda item was “combating climate change”; a version of the ‘cap-and-trade’ bill to which Obama referred in his speech was priced at $282.4 billion total, or $56.5 billion per year.

Other budget items in the President’s speech had a wide range of impacts, such as full passage of the American Jobs Act, $76.6 billion ($15.321 billion per year); initiating the “Fix-it-First” infrastructure repair program at $39.16 billion (or $7.832 billion per year); and, launching three new “manufacturing hubs” for $839 million (or $168 million per year).

The President urged Congress to work with him to replace the sequester cuts, with unspecified “smart savings.” The White House and lawmakers would therefore have to find upwards of $85 billion in reductions over the next five years to offset the canceled 2013 sequester alone. Furthermore, although the President said, “We will invest in new [military] capabilities, even as we reduce waste and wartime spending,” he failed to mention any specific structural changes to Pentagon spending that outside groups estimate could yield $50-$100 billion in annual savings.

More than half of the 40 proposals NTUF analyzed in the speech had fiscal impacts that could not be quantified, while just four were classified as generating offsets. Among these is a controversial scheme that has nothing to do with actually reducing the size of government: forcing companies selling prescription drugs through Medicare to “rebate” part of their earnings to the federal government. The Congressional Budget Office scores these “rebates” as offsetting receipts, amounting to $43.6 billion, or $8.7 billion per year.

President Obama’s Address last night was indeed his most costly set of proposals thus far, eclipsing his $70 billion 2010 State of the Union. President Clinton’s 1999 State of the Union still represents the largest agenda proposed, at $327 billion in increased spending.

“This year’s speech will continue to have a significant impact as lawmakers and taxpayers sift through the President’s most ambitious State of the Union Address so far and look out for what may be heading their way,” Brady concluded. “The President’s upcoming budget proposal could clarify just how significant the fiscal fight between the two parties in Congress will be this year.”

Since 1991, NTUF has tracked the fiscal impact of proposed legislation through BillTally, an accounting database that reports the “net annual agenda cost” for each Member of Congress based on sponsorships and co-sponsorships of pending legislation. For this analysis, NTUF matched Obama’s proposals with those in the BillTally system and in White House documents.

NTUF is the research affiliate of the 362,000-member National Taxpayers Union, a non-profit taxpayer advocacy group founded in 1969. Note: For a PDF of NTUF’s State of the Union analysis Click HERE.

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Founded in 1973, National Taxpayers Union Foundation (NTUF) is a non-partisan research and educational organization dedicated to showing Americans how taxes, government spending, and regulations affect them. Through difference-making data, analysis, and commentary, we empower citizens to engage in the critical policy debates of our time – and hold elected officials accountable.